Not all customers are good for small business

Any customer is a good customer for your small business, right? After all, if someone wants to buy from you, what more can you want? Actually, lots. It turns out some customers are not worth having. And you have to learn how to get rid of them.

Anyone who has been in business very long can tell you there’s a huge difference between good customers, bad customers and downright ugly ones. Some customers cause you headaches and are more work than they’re worth. Some even cost you money.

So what makes for a good customer or client?

They keep coming back. The best customers look for a relationship, not a single product or one-time service. It takes a lot of time, energy and money to acquire new customers, so court those most likely to return.

They shop on more than price. Good customers look for quality, service, convenience, reliability. They recognize (and pay for) the extra value they receive.

They buy a lot. It’s expensive and time-consuming to make lots and lots of small sales to lots and lots of customers. Customers who bring in big dollars are the backbone of your business.

Their purchases are profitable. Even if you’ve priced a product or service correctly, if a customer is too demanding or takes up too much time, your profit evaporates. Of course, occasionally you may have to make some unprofitable sales to retain good customers, but people who are always over-demanding can ruin your bottom line.

They know what they want. By communicating their wants and needs effectively, good customers help you do a good job of serving them. There’s nothing worse than trying to please people who don’t understand what they want.

They pay on time. For any business that sells products on credit or any service in which payment is collected after the service is delivered, prompt payment is critical. Help ensure this by accepting credit cards or offering discounts for upfront payments.

They are ethical. Everyone wants to do business with people they like and respect. The last thing you want is to be constantly watching your back to see if someone is trying to cheat you.

They are financially stable. You don’t want to have to worry about whether your customers can pay their bills.

In most cases, bad customers represent the opposite of good customers: They’re fickle, just looking for the lowest price. They take up lots of time, then they fail to pay or pay very late. Even if a customer is profitable, they can be so problematic that they’re simply not worth it. If you dread dealing with certain customers, it might be time to let them go.

But how do you do that?

Here are four ways to dump that terrible small business client or customer:

Be busy. If yours is a service business, you might choose to make the bad customer the last one in your appointment book. (“I’m completely booked until next month.”) Customers who are frustrated may choose to go elsewhere.

Be expensive. Figure in the extra cost of serving a high-maintenance client. This will either make it worth your while to keep bad clients, or prompt them to seek similar products or services elsewhere.

Be unresponsive. If the client is someone who requires a proposal or bid, take a long time to respond or don’t respond at all.

Be direct. Simply tell the client that you’re no longer able to service their business.

Don’t be rude. With review sites, the above ways of dealing with difficult customers may come back to bite you in the form of scathing negative reviews. Handle bad, unprofitable customers delicately and diplomatically.

Don’t be discriminatory. Make sure you fairly evaluate purchasing patterns and behavior of clients and that you’re not pre-judging someone based on race, gender, age, nationality and the like.